Moberg Pharma AB (Publ) · Moberg Pharma 2.0 remains fully dedicated to the goal of creating the...

MOBERG PHARMA AB (PUBL) 556697‐7426 BOKSLUTSKOMMUNIKÈ 2016

1

Extended fiscal year July 2019 ‐ December 2020

Interim report July – September 2019

Moberg Pharma AB (Publ)

Q1Q2

Q3

Q4

Q5

Q6

MOBERG PHARMA AB (PUBL) 556697‐7426 Interim report July – September 2019

2

AGREEMENTS IN JAPAN AND THE REPUBLIC OF KOREA

“The Phase 3 program for MOB‐015 is on schedule. We expect data from the North American study in December, followed by data from the European study in the second quarter of 2020. At the same time, the commercialization preparations for MOB‐015 are underway and license agreements have now been signed for more key markets, most recently Japan and the Republic of Korea,” says Anna Ljung, CEO of Moberg Pharma.

FIRST QUARTER (JUL‐SEP 2019) Net revenue SEK 47.8 million (15.6) *

R&D investments SEK 18.1 million (18.6) *

Operating profit (EBIT) SEK 41.8 million (5.0) *

Net profit after tax SEK 32.7 million (2.9) *

Diluted earnings per share SEK 1.76 (0.26) *

Cash and cash equivalents amounted to SEK 893.2 million (1,596.9)

* All comparative figures refer to continuing operations

The Annual General Meeting on October 30 has resolved to convert the company’s financial year from a fiscal year to the calendar year, July 1, 2019 – December 31, 2020. This interim report therefore covers the first quarter of the extended fiscal year from July 1, 2019.

SIGNIFICANT EVENTS IN THE FIRST QUARTER In September, an exclusive license agreement was signed with Taisho for development, registration and

commercialization of MOB‐015 in Japan. Under the agreement, Moberg Pharma is eligible to receive milestones of up to USD 50 million contingent on development and commercial success, as well as supply fees including royalties.

In September, the Board of Directors proposed an extraordinary payment to the shareholders of SEK 46.50 per share, an increase from the previously announced preliminary amount of SEK 43–45 per ordinary share. As planned, the payment will be made through an automatic redemption procedure in November 2019.

The Board of Directors has resolved to prepay in full the loan of USD 2.5 million incurred from the purchaser in connection with the divestment of the company's OTC business last spring, since the Board of Directors has determined that the loan is no longer necessary to fund the finalization of the clinical program for MOB‐015.

In July 2019, 488,905 ordinary shares were issued after the exercise of warrants under Moberg Pharma’s share‐based incentive program.

SIGNIFICANT EVENTS AFTER THE END OF THE FIRST QUARTER In October, a distribution agreement was signed with DongKoo for MOB‐015 in the Republic of Korea.

Mark Beveridge, VP Finance, is reassuming responsibility for the finance function and replacing Sarah Hellerfelt, who is leaving her position as CFO of the company.

The Annual General Meeting resolved on October 30 to pay the shareholders SEK 46.50 per share through an automatic redemption procedure, in accordance with the Board of Directors’ proposal.

Conference call – November 19, 2019 at 3:00 p.m. CET

CEO Anna Ljung will present the report at a telephone conference on November 19, 2019 at 3:00 p.m. CET. Dial‐in: SE: +46 8 566 427 04, US: +1 833 526 683 98


3

STATEMENT FROM THE CEO The Phase 3 program for MOB‐015 is on schedule. We expect data from the North American study in December, followed by data from the European study in the second quarter of 2020. At the same time, the commercialization preparations for MOB‐015 are underway and license agreements have now been signed for more key markets, most recently Japan and the Republic of Korea, to complement previous agreements in Europe and Canada.

The work on MOB‐015 is progressing as planned with a focus on the two clinical Phase 3 studies and continued commercialization preparations. All the patients in North America have completed the study and we are expecting the data in December. In Europe, around 70% of patients have now completed the study, with the data expected in the second quarter of 2020. The Phase 3 program comprises a total of 817 patients, including 365 patients randomized at 32 clinics in the US and Canada as well as 452 patients in Europe.

In September, Moberg Pharma signed a license agreement granting Taisho Pharmaceutical exclusive rights to MOB‐015 in Japan, a market that in 2018 amounted to USD 290 million with annual growth of more than 8%. Moberg Pharma will provide know‐how and documentation from the international development program for MOB‐015, and after completion of registration will be responsible for production, while Taisho will fund development and registration activities in Japan and take responsibility for marketing, distribution and sales. Moberg Pharma is eligible to receive up to USD 50 million in milestone payments, including USD 5 million paid at signing. The majority of the milestone payments are contingent on sales targets, with the balance contingent on development and regulatory milestones. Moberg Pharma will also receive supply fees including royalties.

In October, a distribution agreement for MOB‐015 was signed in the Republic of Korea, this time with DongKoo, the market leader in dermatology, with excellent coverage of dermatology clinics. The Korean market for topical drugs for onychomycosis amounts to USD 40 million, and over 90% of prescriptions are written by the clinics. The agreement gives DongKoo exclusive rights to market and sell MOB‐015 in the Republic of Korea. Moberg Pharma assumes production and supply responsibility.

This means that two more agreements for MOB‐015 are in place in addition to the previous agreements with Cipher Pharmaceuticals for Canada and the Consumer Health division of Bayer AG, a world leader in OTC fungus treatments with the brand Canesten, for Europe. The aim is to repeat the journey we took with Kerasal Nail®, where we combined direct sales in the US with strategic collaborations in a number of major regions. The most important markets for MOB‐015 are expected to the US, the EU, Japan, Canada and China, all with patent protection until 2032.

With regard to our other drug candidate, BUPI, discussions are underway with potential new partners in North America and Europe.

On October 30, the Annual General Meeting resolved in accordance with the Board of Directors’ proposal on an extraordinary distribution to the shareholders of SEK 46.50 per share through a share redemption in November 2019. With SEK 893 million in cash reserves as at September 30, the company has sufficient funds to implement the share redemption as planned and to finalize the clinical program for MOB‐015. Moberg Pharma 2.0 remains fully dedicated to the goal of creating the future market leader in the treatment of nail fungus.

Anna Ljung, CEO of Moberg Pharma


4

ABOUT MOBERG PHARMA Moberg Pharma develops and commercializes medical products that relieve pain and skin conditions, especially nail fungus. The company is focused as of April 1, 2019 on the development and commercialization of pipeline assets with a combined annual peak sales potential of USD 350–700 million. The OTC business was divested in the first quarter of 2019 in favor of a clinical pipeline consisting of late stage drug candidates with the potential to significantly exceed the value of the divested portfolio. The divestment enabled shareholders to recognize a compelling value for both components of the business. They will receive a large distribution in November 2019 while also retaining the potential in the development projects.

MOB‐015 is a next‐generation treatment of onychomycosis (nail fungus) and BUPI is a novel treatment for oral pain relief in association with inflammation and ulceration of the oral mucous membranes (oral mucositis or OM), a serious complication of cancer treatment). Both drugs have demonstrated strong Phase 2 results which indicate that they have the potential to become market leaders in their respective niches. Two parallel Phase 3 studies for MOB‐015 are underway with topline results expected in December 2019 and the second quarter of 2020, and with license agreements signed for a number of major markets. We estimate the sales potential for MOB‐015 at USD 250–500 million, with most of the sales expected to come from the high‐priced US prescription drug market. This is in addition to BUPI, with an estimated annual sales potential of USD 100‐200 million.


5

FINANCIAL OVERVIEW

REVENUES AND PROFIT Net sales amounted to SEK 47.8 M (15.6) for the period. Revenue relates to the initial milestone of MUSD 5 received in connection with the agreement with Taisho for MOB‐015 in Japan. For the comparison period, revenue relates to a milestone of EUR 1.5 from the agreement with Bayer AG for MOB‐015 in Europe.

Moberg Pharma's operations consist of research and development, business development and administrative functions. The majority of development expenditure incurred is directly attributable to the clinical phase‐3 studies in the development project for MOB‐015, which is capitalized. The largest expense items for the period consist of business development and administration expenses of SEK 6.5 million (6.8), followed by research and development expenses of SEK 2.6 million (3.6). Profit for the period from continuing operations also include the provision of services related to an agreement on transitional services that was included in the sale of the OTC business. Other operating income include the invoicing for costs related to transition services.

The comparative figures in the consolidated income statement show the impact on earnings from the divested OTC operations as a separate item in the consolidated financials. For the Parent Company, amounts reported in the income statement have not been separated for discontinued operations. A profit and loss account for discontinued operations is presented in Note 2.

CASHFLOW Cash flow before changes in working capital was 41.8 (599.2). Operating receivables increased by SEK 41.5 million as revenue from the milestone with Taisho is expected to be paid in the next quarter. Operating liabilities decreased as the opening balance included payments for shares in advance (after exercise of warrants) of MSEK 26, which is now translated as financing activities. As a result, cash flow from operating activities was SEK ‐29.3 million (25.5). Cash flow from investing activities was SEK ‐21.9 million (1,413.9), of which SEK ‐18 million relates to investments in intangible assets and SEK ‐4 million is related to the final adjustment of net working capital from the sale of the OTC business. Total change in cash and cash equivalents during the quarter was SEK ‐25.9 million (1,485.8). Cash and cash equivalents amounted to SEK 893.2 million (SEK 1,596.9 million) at the end of the period

INVESTMENTS Investments in intangible assets mainly relate to capitalized expenses for development work of SEK 18.2 million (18.6). The company has two late‐stage development projects that are capitalized, MOB‐015 and BUPI. The bulk of monies spent relate to MOB‐015.

R&D expenses (costs and investments) Jul‐Sep Jan‐Mar Jan‐Jun

(SEK thousand) 2019 2019 2019

R&D expenses (in statement of comprehensive income) ‐2,636 ‐3,563 ‐7,165

Capitalized R&D investments ‐18,181 ‐18,597 ‐31,998

Depreciation/amortization booked to R&D expenses 448 367 852

Change in R&D investments (in statement of financial position) ‐17,733 ‐18,230 ‐31,146

Total R&D expenditure ‐20,369 ‐21,793 ‐38,311

LIABILITIES In connection with the divestment of the commercial portfolio in March 2019, the buyer provided financing for a loan of USD 2.5 million. The loan carries a PIK interest rate of 3 months LIBOR + 5.50%. In September, it was announced that the Board of Directors had decided to repay the loan in full prior to maturity, as the Board considers that the loan is no longer necessary to support financing MOB‐015 operations. The loan was repaid after the end of the quarter on October 31, 2019.


6

CHANGES IN EQUITY

SHARES Share capital at the end of the period was SEK 18,853,510 (1,770,376), where the total number of shares outstanding was 18,192,667 ordinary shares (17,703,762) and 660,843 Series B shares (0) with a quotient value of SEK 0.10. Moberg Pharma holds 184,746 (263,000) repurchased own shares at the end of the period.

In July 2019, the number of shares and votes increased as a result of 488,905 ordinary shares having been issued following the exercise of warrants within the framework of Moberg Pharma's share‐related incentive program. The OTC divestment resulted in the vesting of a proportion of outstanding incentive programs pro rata based on the date of the divestment, 29 March 2019. Exercise of the warrants resulted in the number of shares and votes increasing by 488,905 from 18,364,605 to 18,853,510.

SHARE‐BASED COMPENSATION PLANS As of September 30, 2019, the number of outstanding instruments was 175,746 employee stock warrants and 80,022 performance share units. If all employee stock warrants were exercised, the total number of shares would increase by 175,746. Performance share units are issued and held in trust, where the actual number of shares that can be transferred varies between 0 and 100% depending on share price development. The exercise price for the option programs varies between SEK 42.97 and SEK 65.47, and the performance share units are linked to a share price from SEK 35.00. 1 For detailed information on the incentive programs, see the 2019 Annual Report.

The following table gives an indication of the maximum levels of dilution at different levels of share price:

Instruments granted based on strike price

Share price 50 60 70 80 90Number of new shares due to diluting warrants 17,000 108,246 175,746 175,746 175,746Number of shares allocated by performance share units 24,007 33,343 40,011 45,012 48,902

Theoretical dilution 0,2% 0,8% 1,1% 1,2% 1,2%

Company’s market capitalization, SEK million 942 1,136 1,329 1,519 1,708

Gain for instrument holders 2, SEK million 1,3 2,3 4,5 7,1 9,6

Actual dilution from share‐based instruments 3 0,1% 0,2% 0,3% 0,5% 0,6%

OTHER OUTSTANDING INSTRUMENTS Moberg Pharma has, in connection with the buyer of the OTC business providing financing in the form of a loan, issued 659 421 warrants, each of which entitles the buyer of the OTC business to subscribe for a common share in the company at a subscription price of 35.16. SEK per share after the OTC dividend has been completed and with a final subscription date 31 March 2023. The warrants will not be eligible for the OTC dividend and may not be exercised until completion of the OTC dividend.

1 Redemption prices will be subject to recalculation after the OTC dividend has been executed in accordance with the terms of the respective incentive program 2 Total pretax gain for warrant holders 3 Calculated from the gain made by instrument holders through market capitalization at the given share price


7

SHAREHOLDER INFORMATION The company’s largest shareholders per September 30, 2019:

Shareholders Number of shares % of votes and capital

FÖRSÄKRINGSBOLAGET, AVANZA PENSION4 2,618,392 13.89

ÖSTERSJÖSTIFTELSEN 2,274,179 12.06

ZIMBRINE HOLDING BV 1,890,525 10.03

NORDNET PENSIONSFÖRSÄKRNING AB 1,051,634 5.58

JAZZ HOLDCO, INC 660,8435 3.51

NORMAN, CARL ERIK 414,000 2.20

LINDBÄRG, ERIK 390,000 2.07

LUNDMARK, SVEN ANDERS 324,500 1.72

EUROCLEAR BANK S.A/N.V,W8‐IMY 199,943 1.06

MOBERG PHARMA AB 184,746 0.98

BNY MELLON SA/NV (FORMER BNY), W81MY 183,553 0.97

SYNSKADADES STIFTELSE 172,201 0.91

70133904, DANICA PENSION 170,300 0.90

SOCIETE GENERALE 157,291 0.83

GUNNARSSON, MIKAEL 157,000 0.83

BNY MELLON NA (FORMER MELLON), W9 155,917 0.83

GAR‐BO FÖRSÄKRING AB 155,120 0.82

SKANDIA, FÖRSÄKRINGS 149,877 0.79

ML, PIERCE, FENNER & SMITH INC 147,414 0.78

STATE STREET BANK AND TRUST CO, W9 112,118 0.59

TOTAL, 20 LARGEST SHAREHOLDERS 11,569,553 61.4

Other shareholders 7,283,957 38.7

TOTAL 18,853,510 100

PARENT COMPANY Moberg Pharma AB (publ), org. nr 556697‐7426, är moderbolag i koncernen. Verksamheten i koncernen bedrivs huvudsakligen i moderbolaget och utgörs, sedan slutet av mars 2019, av forskning och utveckling, affärsutveckling samt administrativa funktioner.

For the comparative year, amounts reported in the Parent Company's income statement have not been separated for discontinued operations. Comparatives include transaction costs for the divestment of the OTC operations for SEK 40 million. Financial income for comparatives include the reported capital gain on the divestment of the OTC business for SEK 592 million and a dividend from the then subsidiary Moberg Pharma North America LLC for SEK 55 million.

Cash and cash equivalents amounted to SEK 893.2 (1,596.9) at the end of the period.

4 Includes 435,399 shares owned by the company's Chairman Peter Wolpert through an endowment insurance policy 5 Series B shares


8

OTHER INFORMATION

ORGANIZATION Per September 30, 2019, the Moberg Pharma Group had 14 employees, of whom 93% were women. All employees are employed by the parent company.

RISK FACTORS Commercialization and development of pharmaceuticals are capital‐intensive activities exposed to significant risks. Risk factors considered of particular significance for Moberg Pharma’s future development are linked to the results of clinical trials, regulatory actions, patents and trademarks, key personnel, sensitivity to economic fluctuations, future capital requirements, and financial risk factors. A description of these risks can be found in the company’s 2019 Annual Report on page 19.

OUTLOOK Moberg Pharma’s goal is to create value and provide attractive shareholder returns through the successful commercialization of its pipeline assets.

In 2019/2020, the focus is on advancing the company's phase 3 development programs and to continue commercialization preparations to maximize value and create future growth. Moberg Pharma will utilize the cash flow from the divestment of the commercial operations to provide a distribution to shareholders through a redemption of shares while retaining sufficient capital, taking into account expected revenues, to complete the ongoing Phase 3 studies for MOB‐015.

It is the view of the Board of Directors and executive management that the company has sufficient funds, taking into account the planned OTC‐dividend, to complete the ongoing clinical activities.

DISTRIBUTION OF SEK 46.50 PER ORDINARY SHARE In March 2019, the OTC business was divested for a cash consideration of USD 155 million, adjusted for working capital. The company intends to use the cash consideration to, among other things, distribute SEK 46.50 per ordinary share after the Annual General Meeting on October 30, 2019.

The Annual General Meeting for the abbreviated fiscal year January 1 – June 30, 2019, which was held on October 30, 2019, has resolved on an extraordinary distribution to the shareholders of Moberg Pharma in the form of an automatic redemption. The purchaser of the OTC business will not be entitled to the distribution. An information brochure on the proposed redemption procedure is available (Swedish only) on the company’s website.

By way of the automatic redemption, each ordinary share is split into one ordinary share and one redemption share. The redemption share will then automatically be redeemed for SEK 46.50 per share. The redemption shares will also be listed for trading on Nasdaq Stockholm. Accordingly, shareholders can choose to either (a) retain their redemption shares and receive the redemption payment, or (b) sell their redemption shares on Nasdaq Stockholm, which for shareholders resident outside of Sweden may be favorable from a tax perspective. Payment for the redemption shares is expected around November 26, 2019.


9

Following the Annual General Meeting’s resolution on October 30,

2019, each ordinary share is split into two shares, one of which is

called an ordinary redemption share.

The ordinary redemption shares are then automatically

redeemed for SEK 46.50 per ordinary redemption share.

How it works

IMPORTANT DATES

November 1

Last trading date for ordinary shares

including the right to receive ordinary

redemption shares

November 4

First trading date for ordinary shares

excluding the right to receive ordinary

redemption shares

November 5

Record date for the right to receive

ordinary redemption shares

November 6 – 19

Trading in ordinary redemption shares on

Nasdaq Stockholm

November 26

Estimated payment date of redemption

proceeds

Illustrative example You are registered on the record date of the share split as owning 100 ordinary shares. The assumed share price in the example is SEK 65 per ordinary share. Your ordinary shares are therefore worth:

100 ordinary shares x SEK 65 = SEK 6,500

When the redemption procedure begins, each ordinary share will be split into in one ordinary share and one ordinary redemption share. The theoretical price of the ordinary shares after the split is estimated at SEK 18.50, which is the difference between the assumed share price before the split and the value of the ordinary redemption share (SEK 65 ‐ SEK 46.50). Your shareholding then looks like this:

100 ordinary shares x SEK 18.50 = SEK 1,850

100 ordinary redemption shares x SEK 46.50 = SEK 4,650

Moberg Pharma will then automatically redeem your ordinary redemption shares for SEK 46.50 in cash per ordinary redemption share. This requires no action on your part as a shareholder. After the redemption procedure, you will have:

100 ordinary shares x SEK 18.50 = SEK 1,850

Cash payment for 100 ordinary redemption shares x SEK 46.50 = SEK 4,650

You now have the same number of ordinary shares that you did before the redemption procedure and have received SEK 46.50 in cash for each redeemed ordinary redemption share.

The ordinary redemption shares will be traded on Nasdaq Stockholm in the period November 6 – November 19, 2019 and you as a holder of ordinary redemption shares can then sell them.

This example does not take into account any tax effects that may arise in connection with the redemption or changes in the share price after the record date.

BEFORE AFTER

100 ordinary shares in Moberg Pharma

100 ordinary shares in Moberg Pharma

100 ordinary shares

in Moberg

100 ordinary redemption shares


10

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Jul‐Sep Jan‐Mar Jan‐Jun

(SEK thousand) 2019 2019 2019

Continuing operations

Net revenue 47,819 15,554 15,554

Cost of goods sold ‐ ‐ ‐

Gross profit 47,819 15,554 15,554

Selling expenses ‐162 ‐566 ‐788

Business development and administrative expenses ‐6,528 ‐6,823 ‐15,334

Research and development costs ‐2,636 ‐3,563 ‐7,165

Other operating income 3,264 350 3,514

Other operating expenses ‐ ‐ ‐

Operating profit (EBIT) 41,757 4,952 ‐4,219

Interest income and similar items ‐ 29 121

Interest expenses and similar items ‐515 ‐255 ‐966

Profit after financial items from continuing operations (EBT) 41,242 4,726 ‐5,064

Tax on profit for the period ‐8,579 ‐1,853 336

PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS 32,663 2,873 ‐4,728

Discontinued operations

Profit after tax for the period from discontinued operations (see Note 2) ‐ 561,032 563,544

PROFIT FOR THE PERIOD 32,663 563,905 558,816

Items that will be reclassified to profit

Translation differences of foreign operations ‐ 8,855 8,855

Reclassification of translation differences to profit from sale of discontinued operations

‐ ‐68,249 ‐68,249

Other comprehensive income ‐ ‐59,394 ‐59,394

TOTAL PROFIT FOR THE PERIOD 32,663 504,511 499,422

Whereof total profit from continuing operations 32,663 2,873 ‐4,728

Whereof total profit from discontinued operations (see Note 2)

‐ 501,638 504,150

Profit for the period attributable to parent company shareholders 32,663 563,905 558,816

Total profit attributable to parent company shareholders 32,663 504,511 499,422

Basic earnings per share 1.77 32.33 31.42

Diluted earnings per share 6 1.76 31.95 31.14

Basic earnings from continuing operations per share 1.77 0.26 ‐0.27

Diluted earnings from continuing operations per share 3 1.76 0.26 ‐0.27

EBITDA from continuing operations 42,392 7,303 ‐2,950

6 In periods when the Group reports a loss, no dilution effect arises. The reason for this is that a dilution effect is only recognized when a potential conversion to ordinary shares would result in lower earnings per share.


11

CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN BRIEF

(SEK thousand) 2019‐09‐30 2019‐03‐31 2019‐06‐30

Assets

Intangible assets 273,835 242,253 255,654

Capitalized R&D 266,985 235,403 248,804

Patents 6,850 6,850 6,850

Property, plant and equipment 62 97 80

Right‐of‐use assets 9,876 11,111 10,493

Deferred tax asset 3,038 8,927 11,617

Total non‐current assets 286,811 262,388 277,844

Trade receivables and other receivables 52,485 5,521 12,994

Cash and cash equivalents 893,213 1,596,943 919,134

Total current assets 945,698 1,602,464 932,128

TOTAL ASSETS 1,232,509 1,864,852 1,209,972

Equity and liabilities

Equity (attributable to parent company’s shareholders) 1,177,033 1,099,676 1,121,029

Non‐current interest‐bearing liabilities ‐ 23,205 23,642

Non‐current leasing liabilities 7,709 8,949 8,331

Non‐current non‐interest‐bearing liabilities 65 65 65

Total non‐current liabilities 7,774 32,219 32,038

Current interest‐bearing liabilities 25,475 623,629 ‐

Current leasing liabilities 2,469 2,265 2,366

Current non‐interest‐bearing liabilities 19,758 107,063 54,539

Total current liabilities 47,702 732,957 56,905

TOTAL EQUITY AND LIABILITIES 1,232,509 1,864,852 1,209,972


12

CONSOLIDATED STATEMENT OF CASH FLOWS IN BRIEF


(SEK thousand) 2019 2019 2019

Operating activities

Operating profit before financial items from continuing operations 41,757 4,952 ‐4,219

Operating profit before financial items from discontinued operations ‐ 594,260 599,371

Operating profit before financial items 41,757 599,182 595,152

Financial items, received and paid ‐59 ‐9,427 ‐42,288

Taxes paid ‐ ‐15 ‐15

Adjustments:

Depreciation/amortization and capital gains 635 9,883 10,518

Capital gains ‐ ‐619,874 ‐624,905

Revaluation assets/liabilities ‐ ‐ ‐

Employee share‐based adjustments to equity7 185 1,147 1,675

Cash flow before changes in working capital 42,518 ‐19,073 ‐59,863

Change in working capital

Increase (‐)/Decrease (+) in inventories ‐ ‐3,197 ‐3,481

Increase (‐)/Decrease (+) in operating receivables ‐41,501 41,280 19,050

Increase (+)/Decrease (‐) in operating liabilities ‐30,314 6,494 6,441

OPERATING CASH FLOW ‐29,297 25,504 ‐37,853

Investing activities

Net investments in intangible assets ‐18,181 ‐18,995 ‐32,396

Net investments in subsidiaries ‐3,760 1,432,866 1,432,816

CASH FLOW FROM INVESTING ACTIVITIES ‐21,941 1,413,871 1,400,420

Financing activities

Issue of loans ‐ 23,205 23,205

Repayment of loans ‐ ‐ ‐600,000

Repayment of leases ‐520 ‐ ‐1,031

Issue of new shares less transaction costs 25,837 23,206 23,236

CASH FLOW FROM FINANCING ACTIVITIES 25,317 46,411 ‐554,590

Change in cash and cash equivalents ‐25,921 1,485,786 807,977

Cash and cash equivalents at beginning of period 919,134 110,785 110,785

Exchange rate differences in cash and cash equivale ‐ 372 372

Cash and cash equivalents at the end of period 893,213 1,596,943 919,134

7 Note that revaluation of estimated costs for social security contributions for employee stock options is reported in change in operating liabilities.


13

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(TSEK) Share capital Other capital

contributionsTranslation

reserve Accumulated

lossTotal equity

July 1 – September 30, 2019

Opening balance July 1,2019 1,818 555,639 ‐ 563,573 1,121,030

Total income

Profit for the period 32,663 32,663

Transactions with shareholders

New share issue 49 23,107 23,156

Employee stock options 185 185

CLOSING BALANCE SEPTEMBER 30, 2019 1,867 578,931 ‐ 596,236 1,177,034

January 1 – March 31, 2019

Opening balance, January 1, 2019 1,744 528,122 59,394 4,758 594,018

Total income


Other comprehensive income – translation differences on translation of foreign operations

‐59,394 ‐53,394


Employee stock options 1,147 1,147

CLOSING BALANCE, MARCH 31, 2019 1,744 529,269 ‐ 568,663 1,099,676

January 1 – June 30, 2019

Opening balance, January 1, 2019 1,744 528,122 59,394 4,758 594,018

Total income


Other comprehensive income – translation differences on translation of foreign operations

‐59,394 ‐59,394


New share issue 66 23,169 23,235

Employee stock options 8 4,348 4,356

CLOSING BALANCE, JUNE 30, 2019 1,818 555,639 ‐ 563,573 1,121,030


14

KEY RATIOS FOR THE GROUP


(SEK thousand) 2019 2019 2019

Net revenue 47,819 15,554 15,554

EBITDA 42,392 7,303 ‐2,950

Operating profit (EBIT) 41,757 4,952 ‐4,219

Profit after tax 32,663 563,905 558,816


Balance sheet total 1,232,509 1,864,852 1,209,972

Equity/assets ratio 95% 59% 93%

Return on equity 3% 51% 50%

Diluted earnings per share, SEK 1.76 31.95 31.35

Equity per share, SEK 63.05 63.05 61.66

Basic average number of shares 18,505,796 17,440,762 17,662,347

Diluted average number of shares 18,559,047 17,649,066 17,825,850

Number of shares at the end of the period excluding repurchased own shares

18,668,764 17,440,762 18,179,859

Share price on balance sheet date, SEK 67.70 66.20 65.90

Market capitalization balance date, SEK millions 1,264 1,155 1,198

DEFINITIONS OF KEY RATIOS Moberg Pharma presents certain financial performance measurements in the interim report that are not defined in accordance with IFRS. In Moberg Pharma’s opinion, these performance measurements provide valuable additional information to investors and company management as they enable an evaluation of the company’s performance. These financial performance measurements are not always comparable with those used by other companies since not all companies calculate them in the same manner. Accordingly, these financial measurements are not to be regarded as a replacement for the performance measurements defined in accordance with IFRS.

Net revenue adjusted for Net revenue for products owned by the company through the entire reporting period and acquisitions and divestments through the entire comparative period.

EBITDA Operating profit before depreciation/amortization and impairment of intangible assets and property, plant, and equipment

Equity/assets ratio Equity at the end of the period in relation to balance sheet total

Return on equity Profit for the period divided by closing equity

Earnings per share* Profit after tax divided by the diluted average number of shares

Equity per share Equity divided by the number of shares outstanding at the end of the period

* Defined in accordance with IFRS


15

PARENT COMPANY INCOME STATEMENT SUMMARY


(SEK thousand) 2019 2019 2019

Net revenue 47,819 42,848 42,848

Cost of goods sold ‐ ‐2,503 ‐2,477

Gross profit 47,819 40,345 40,371

Selling expenses ‐162 ‐11,228 ‐11,450

Business development and administrative expenses ‐6,528 ‐48,397 ‐56,908

Research and development costs ‐2,636 ‐4,259 ‐7,860

Other operating income 3,264 991 4,208

Other operating expenses ‐ ‐ ‐

Operating profit 41,757 ‐22,548 ‐31,639

Capital gain from divested subsidiary and similar income ‐ 641,484 646,606

Interest expenses ‐515 ‐38,633 ‐42,445

Profit after financial items 41,242 580,303 572,522

Tax on profit for the period ‐8,579 3,862 6,553

PROFIT 32,663 584,165 579,075

For comparative information (the abbreviated fiscal year January ‐ June 2019), amounts reported in the Parent Company's income statement have not been separated for discontinued operations.


16

PARENT COMPANY BALANCE SHEET SUMMARY

(SEK thousand) 2019‐09‐30 2019‐03‐31 2019‐06‐30

Assets

Intangible assets 273,835 242,253 255,654

Property, plant and equipment 62 97 80

Right‐of‐use assets 9,876 11,111 10,493

Non‐current financial assets 150 150 150

Deferred tax asset 3,038 8,927 11,617

Total non‐current assets 286,961 ,262,538 277,994,

Inventories ‐ ‐ ‐

Trade receivables and other receivables 52,485 5,522 12,994

Receivables from Group companies ‐ ‐ ‐


Total current assets 945,648 1,602,415 932,078

TOTAL ASSETS 1,232,609 1,864,953 1,210,072

Equity and liabilities

Equity 1,177,033 1,099,677 1,121,030

Non‐current interest‐bearing liabilities ‐ 23,205 23,642

Non‐current lease liabilities 7,709 8,949 8,331

Non‐current non‐interest‐bearing liabilities 65 65 65

Total non‐current liabilities 7,774 32,219 32,038

Liabilities to Group companies 99 99 99

Current interest‐bearing liabilities 25,475 623,629 ‐

Current lease liabilities 2,469 2,265 2,366

Current non‐interest‐bearing liabilities 19,759 107,064 54,540

Total current liabilities 47,802 733,057 57,005

TOTAL EQUITY AND LIABILITIES 1,232,609 1,864,953 1,210,072


17

PARENT COMPANY CASH FLOW STATEMENT SUMMARY


(SEK thousand) 2019 2019 2019

Operating activities

Operating profit before financial items 41,757 ‐22,548 ‐31,639

Financial items, received and paid ‐59 ‐9,427 ‐42,288

Adjustments:

Depreciation/amortization and capital gains 635 8,457 9,092

Revaluation assets/liabilities ‐ ‐ ‐

Employee share‐based adjustments to equity 185 834 1,362

Cash flow before changes in working capital 42,518 ‐22,684 ‐63,473

Change in working capital

Increase (‐)/Decrease (+) in inventories ‐ 728 443

Increase (‐)/Decrease (+) in operating receivables ‐41,501 68,747 5,309

Increase (+)/Decrease (‐) in operating liabilities ‐30,314 ‐4,459 36,696

OPERATING CASH FLOW ‐29,297 42,332 ‐21,025

Investing activities

Net investments in intangible assets ‐18,181 ‐18,664 ‐32,065

Net investments in subsidiaries ‐3,760 1,432,816 1,432,766

CASH FLOW FROM INVESTING ACTIVITIES ‐21,941 1,414,152 1,400,701

Financing activities

Issue of loans ‐ 23,205 23,205

Repayment of loans ‐ ‐ ‐600,000

Repayment of leases ‐520 ‐ ‐1,031

Issue of new shares less transaction costs 25,837 23,206 23,236

CASH FLOW FROM FINANCING ACTIVITIES 25,317 46,411 ‐554,590

Change in cash and cash equivalents ‐25,921 1,502,895 825,086

Cash and cash equivalents at the beginning of the period 919,084 93,998 93,998

Cash and cash equivalents at the end of the period 893,163 1,596,893 919,084


18

NOTE 1 ACCOUNTING POLICIES AND MEASUREMENT PRINCIPLES The interim report was prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. The consolidated financial statements were, like the annual accounts for 2019, prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the Swedish Annual Accounts Act. The parent company financial statements were prepared in accordance with Swedish Annual Accounts Act and Recommendation RFR 2 of the Swedish Financial Reporting Board, Financial Statements for Legal Entities.

Amounts are presented in Swedish kronor and rounded to the nearest thousand unless otherwise stated. Rounding to the nearest thousand may mean that certain amounts do not match when added up. MSEK stands for million Swedish kronor. Amounts and figures in parentheses are comparative figures from the previous year.

NOTE 2 DISCONTINUED OPERATIONS On February 12, 2019, the company announced that it had entered into an agreement to divest its subsidiaries MPJ OTC AB and Moberg Pharma North America LLC. According to the terms of the agreement, the parent company's OTC business was transferred to the subsidiary MPJ OTC AB prior to the transaction. The divested business comprises the company's entire commercial operations and the transaction is thus reported as discontinued operations. The transaction was completed on March 29,2019 for a total cash consideration of SEK 1,432.8 million, which resulted in a net gain of SEK 561 million after transaction costs. The effect from the divestment on the total profit was SEK 501 million. INCOME STATEMENT DISCONTINUED OPERATIONS


(SEK thousand) 2019 2019 2019

Revenue ‐ 91,919 91,919

Cost of goods sold ‐ ‐22,319 ‐22,293

Gross Profit ‐ 69,599 69,626

Selling expenses ‐ ‐51,262 ‐51,262

Business development and administration expenses ‐ ‐3,255 ‐3,255

Research and development expenses ‐ ‐1,158 ‐1,158

Other operating items ‐ 687 741

Operating Profit ‐ 14,612 14,692

Finance costs ‐ ‐14,378 ‐17,478

Tax benefit/(expense) ‐ 5,150 5,651

Post‐tax profit/(loss) of discontinued operations ‐ 5,384 2,865

Capital gain on sale of discontinued operations ‐ 619,874 624,905

Transaction costs on sale of discontinued operations and bond redemption ‐ ‐40,226 ‐40,226

Financial charges from sale of discontinued operations ‐ ‐24,000 ‐24,000

Post‐tax gain on sale of discontinued operations ‐ 555,648 560,679

Profit/(loss) after tax for the period from discontinued operations ‐ 561,032 563,544

Items that will be reclassified to profit

Translation differences of foreign operations ‐ 8,855 8,855

Reclassification of translation differences to profit from sale of discontinued

operations ‐ ‐68,249 ‐68,249

Other comprehensive income ‐ ‐59,394 ‐59,394

TOTAL PROFIT FOR THE PERIOD ‐ 501,638 504,150


19

NOTE 3 SPECIFICATION OF MAJOR INTANGIBLE NON‐CURRENT ASSETS

(SEK thousand) 2019‐09‐30 2019‐03‐31 2019‐06‐30

Capitalized expenditure for MOB‐015 252,431 221,161 234,417

Capitalized expenditure for BUPI 14,554 14,242 14,387

TOTAL CAPITALIZED EXPENDITURE FOR DEVELOPMENT WORK 266,985 235,403 248,804

NOTE 4 SEGMENT REPORTING Moberg Pharma’s operations comprise only one area of operation, which is the development and commercialization of medical products. The statement of comprehensive income and statement of financial position as a whole comprise one operating segment.

NOTE 5 RELATED PARTY TRANSACTIONS No material changes have occurred in relationships and transactions with related parties compared with that as described in the Annual Report.

INFORMATION AND FINANCIAL CALENDAR This information is such that Moberg Pharma AB (publ) is obliged to disclose pursuant to the Securities Market Act and/or the Financial Instruments Trading Act.

Interim report for July 2019 – December 2019 February 19, 2020

Interim report for July 2019 – March 2020 May 12, 2020

Interim report for July 2019 – June 2020 August 11, 2020

Interim report for July 2019 – September 2020 November 10, 2020

The Annual General Meeting for the abbreviated fiscal year 1 January to 30 June 2019 was held on October 30, 2019 at the company’s premises.

FOR FURTHER INFORMATION, PLEASE CONTACT Anna Ljung, CEO, phone 08‐522 307 00, [email protected] Mark Beveridge, VP Finance, phone 076 ‐ 805 82 88, [email protected] For more information on Moberg Pharma’s business, please see the company’s website, www.mobergpharma.com. This interim report has not been reviewed by the company’s auditors.

DECLARATION The undersigned hereby declare that the interim report provides a true and fair overview of the operations, financial position, and results of the parent company and Group, as well as a fair description of significant risks and uncertainties faced by the parent company and Group companies.

Bromma, November 19, 2019

Peter Wolpert Chairman of the Board

Fredrik Granström Board member

Andrew B. Hochman Board member

Mattias Klintemar Board member

Anna Ljung CEO

Moberg Pharma AB (Publ) · Moberg Pharma 2.0 remains fully dedicated to the goal of creating the...

Documents

Transcript of Moberg Pharma AB (Publ) · Moberg Pharma 2.0 remains fully dedicated to the goal of creating the...